By Mabvuto Banda
LILONGWE (Reuters) - Malawi holds parliamentary and presidential elections Tuesday that could test the political stability needed to secure continued Western donor funding to the poor but fast-growing African country.
President Bingu wa Mutharika's strong economic record makes him a favourite among foreign investors. He won billions of dollars in debt relief for driving reforms that have yielded growth of around 7 percent a year for the past three years.
Wa Mutharika's chances of victory could have increased further after the Constitutional Court upheld a decision to prevent former President Bakili Muluzi from contesting.
But the ruling might also reignite political tensions in a country of 13 million where recent upheavals have unnerved donors and have led to months of delays in approving state budgets.
Seven candidates, including one woman, are in the race.
Malawi depends heavily on tobacco exports but is banking on a uranium mine which opened last month to diversify its economy.
Despite the ruling against him, Muluzi remains a powerful political force and has an informal electoral alliance with main opposition leader John Tembo.
Muluzi stepped down in 2004 after a failed attempt to change the constitution to let him stand for a third term. Wa Mutharika then took office following an election marred by violence and accusations of rigging.
After announcing a comeback last year, Muluzi was detained on suspicion of involvement in a coup plot, but charges were dropped. He was charged in February with stealing aid money during his time in office.
The Economist Intelligence Unit has forecast that Malawi will have the world's fastest growing economy this year -- after Qatar -- but two thirds of Malawians live on less than $1 a day and AIDS has orphaned an estimated one million children.
Critics say wa Mutharika has neglected the poor.
"The greatest challenges that the country faces in the coming four years are the fight against poverty, putting more people on free AIDS treatment and consolidating the food security situation," said political commentator Rafiq Hajat.
(Writing by Michael Georgy; Editing by Giles Elgood)